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Author Question: How does insurance reduce risk? What will be an ideal response?[br][br][b][color=#FBB117]Question ... (Read 88 times)

jhjkgdfhk

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on: Jun 29, 2018
How does insurance reduce risk?
 
  What will be an ideal response?

Question 2

As the number of firms in a market increases, the supply curve will shift to the left and the equilibrium price will rise.
 
  Indicate whether the statement is true or false
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abro1885

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Insurance reduces the risk any individual faces because insurance pools risks. Everyone pays into the pool but only the small fraction of people who suffer a loss are paid from the pool. Essentially people reduce the risk of a large adverse financial outcome in exchange for the small, certain payment to the insurance company.

Answer to Question 2

FALSE


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